Tag Archives: BA

Basis

Basis

Basis means:
an amount usually representing the taxpayer's cost in acquiring an asset. It is used for a variety of tax purposes, including computation of gain or loss on the sale or exchange of the asset and depreciation with respect to the asset. Former IRC (check if this IRC provision is current here) §1012.

See also other Tax Terms and Definitions in U.S.A.

adjusted basis; carryover; recovery of basis; stepped-up basis.

Example of Basis:

Learn more about tax examples, explanations and calculations here.

Collins purchases land for $10,000 and erects a store for $80,000. Her tax basis is $90,000. If she then sells the property for $95,000, she has a $5,000 gain. If she instead depreciates the property, the $80,000 cost basis of improvements is depreciable; the $10,000 basis of the land remains because land is not depreciable.

The amount of a taxpayer's investment in a property for tax purposes, adjusted for certain items.

See adjusted basis.

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.

Description and Definition of Basis

The amount you paid for an asset plus certain other costs that increase your basis – less depreciation previously taken. You need to know your “basis” to figure gain or loss on a sale.

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Balance Sheet

Balance Sheet

Balance Sheet means:
a financial statement that gives an accounting picture of the property owned by a company or individual and of claims against that property on a specific date. The left (debit) side of a balance sheet lists assets; the right (credit) side shows liabilities and owners' equity. The two sides must be equal (balance). The balance sheet is like a snapshot of the company's or individual's position at one point in time.

U.S. and other Developed Countries International Tax Meaning

Statement of the financial position of a business as of a particular date. The statement will show the business's assets in one column and its liabilities and owner's equity in another column.

Description and Definition of Balance Sheet

A balance sheet is an itemized statement which lists the total assets and the total liabilities of a business to evidence company's financial health and net worth at a given moment in time. The amounts shown on a balance sheet are generally the historic cost of items and not their current values.

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Balloon Payment

Balloon Payment

Description and Definition of Balloon Payment

A balloon payment is usually a final loan payment that is considerably higher than the prior regular payments. You may have a balloon payment for a short term loan that you intend to refinance.

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Bargain Sale to Charity

Bargain Sale to Charity

Description and Definition of Bargain Sale to Charity

The sale of property to a charity at a price that's less than the fair market value. Under certain circumstances this may result in a tax deduction or taxable income to you. If the property has appreciated in value you must allocate your basis between the portion of property sold and the portion of property donated. Any gain on the portion of property sold is taxable, and the remaining portion is deductible as a charitable contribution subject to the charitable contribution rules.

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Bankruptcy

Bankruptcy

Bankruptcy means:
a state of insolvency of an individual or an organization, that is, an inability to pay debts. Two kinds of bankruptcy under U.S. law are: (1) Chapter 7, or involuntary, when one or more creditors petition to have a debtor judged insolvent by a court, and (2) Chapter 11, or voluntary, when the debtor brings the petition. In both cases the objective is an orderly and equitable settlement of obligations.

See also other Tax Terms and Definitions in U.S.A.

Chapter 7 of the 1978 Bankruptcy Act; Chapter 11 of the 1978 Bankruptcy Act.

Description and Definition of Bankruptcy

A person or company is considered bankrupt if they are unable to pay their bills and debts in a timely fashion. Under Chapter 11 (for businesses) and Chapter 13 (for wage earners) the bankrupt tries to reorganize his/its debts.

Bankruptcy Issue

You may find information about Bankruptcy in this Tax Platform of the American Encyclopedia of Law.

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Backup Withholding

Backup Withholding

Backup Withholding means:
the procedure used to ensure that federal income tax is paid on earnings even though the recipient cannot be identified by a Social Security number. Banks, brokers, and other entities report nonwage earnings paid out on U.S. Internal Revenue Service (IRS) Former Federal Tax Form (check here if the Form is current) (see if this Former Federal Tax Form (check here if the Form is current) is current here) 1099. When the Former Federal Tax Form (check here if the Form is current) cannot be filed because the taxpayer's Social Security number is unavailable, 31% of the interest, dividends, or fees is withheld by the payer and remitted to the federal government. Former IRC (check if this IRC provision is current here) §3405.

Example of Backup Withholding:

Learn more about tax examples, explanations and calculations here.

If interest earned on a bank account is $1,000 and there is no Social Security number on file for the account, the bank withholds $310. The taxpayer receives a Former Federal Tax Form (check here if the Form is current) 1099 showing the interest and tax withheld, which may be claimed when filing the Former Federal Tax Form (check here if the Form is current) 1040.

See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.

See Dividend in the American Legal Encyclopedia and Dividend in the World Legal Encyclopedia.

See Tax Forms in the Encyclopedia.

Description and Definition of Backup Withholding

Backup Withholding is income tax that is withheld from investment income such as interest and dividends to ensure that the tax is collected. Banks and other financial institutions are required to report to the IRS all interest and dividends paid along with your social security number or taxpayer identification number. If they do not have adequate reporting information for you they are required to withhold 31 percent of your investment income. The IRS may also require the bank or financial institution to withhold tax if the IRS determines you have underreported your investment income in a prior year. Your Form 1099-INT or Form 1099-DIV will show any backup withholding as “Federal income tax withheld.”

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Bargain Sale

Bargain Sale

About Bargain Sale:

generally, the sale of property for less than fair market value. A bargain aile to a charitable organization is treated as partly a charitable contribution deduction . and partly a sale or exchange. The basis of the property sold must be allocated between the portion “sold” and the portion “given” to charity, based on the fair market value of each portion. A bargain sale may result in a taxable gain even if the selling price does not exceed the basis for the entire property.

Selling property to a charity for less than the property's actually worth. Depending on the circumstances, this could result in a tax deduction or extra taxable income.

Barrier Removal Costs

Barrier Removal Costs

Barrier Removal Costs means:
a business deduction of up to $15,000 of the costs of removing architectural and transportation barriers for handicapped and elderly people in the year paid or incurred. Otherwise, such costs must be capitalized and depreciated. Former IRC (check if this IRC provision is current here) §44.

See also other Tax Terms and Definitions in U.S.A.

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